Oil prices slide on eurozone worries

3rd May 2011, Comments 0 comments

Oil prices slid on Tuesday on fresh concerns over the eurozone debt crisis, alongside implications from the death of al-Qaeda chief Osama bin Laden.

Brent North Sea crude for delivery in June tumbled $1.33 to $123.79 a barrel in early afternoon London deals.

New York's main futures contract, light sweet crude for June, sank $1.22 to $122.30 a barrel.

"Both Brent and (New York) crude oil contracts slid lower in correction, following the uncertain economic conditions as renewed concerns raised about eurozone's sovereign debt problems, especially for Greece," said Sucden analyst Myrto Sokou.

Prices had fluctuated wildly on Monday following weekend news of bin Laden's demise.

In a dramatic announcement on Sunday, the White House revealed that US forces had killed the al-Qaeda chief behind the September 11, 2001 attacks, at his secret compound in Pakistan.

In reaction, New York crude had plunged on Monday underneath $110 a barrel, but swiftly reversed course to peak at $114.83 before easing back.

"The energy market was fairly volatile on Monday following news that the US forces claimed killing Osama bin Laden," said analyst Sokou.

"Crude oil prices initially fell almost $4 per barrel but easily rebounded and rallied with Brent oil climbing above $126 per barrel, while WTI crude oil almost tested the $115 per barrel area," she added.

The United States warned on Tuesday that it would probe how bin Laden managed to live in undetected luxury in Pakistan, as gripping details emerged about the US commando raid that killed the Al-Qaeda kingpin.

Officials said DNA tests had proven conclusively that the man shot dead by US special forces in Abbottabad was indeed the Islamist terror mastermind who boasted about the deaths of 3,000 people in the September 11 attacks.

Meanwhile, investors are also monitoring political unrest in the oil-producing Arab world and its impact on crude supplies.

Later on Tuesday, traders will absorb more crucial economic data in the United States, which is the world's biggest crude-consuming nation.

Figures slated for publication include US durable goods and factory orders for March, while the market will monitor the dollar's direction.

A weaker US currency makes dollar-priced oil cheaper, boosting demand and leading to higher prices.


© 2011 AFP

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